Upbeat on the current trend in FM radio, the Information and Broadcasting Ministry has finally decided to auction the vacant FM radio channels of Phase II of radio licensing. The last date for pre-qualification bids for 97 FM radio stations in 48 cities across India is July 23.
In the second phase of FM radio licensing, 336 FM stations were auctioned at the beginning of 2006. The government of India collected a sum of more than Rs 1,100 crore from private FM radio players as one-time entry fee (OTEF). As per a cap of 15 per cent of the total number of channels, as well as the one channel per city norms, BIG FM from Adlabs and Suryan FM from Sun Network had to return more than 30 channels last year. More than 50 channels were also not sold out largely in the North East in the Phase II auction.
The qualification for bid is exactly same as last year. Interestingly, Dehradun has been added in the new pre-qualification bid published by the government.
Commenting on the development, Rajiv Mishra, Managing Director, Digital Broadcasting Private Ltd, said, “Delhi, Mumbai, Ahmedabad and Bangalore will again see aggressive bidding as five new channels will be coming up in these cities. The current multi-channel operators, particularly of smaller towns, will try to get metros as those cities are major driver for ad sales bookings.”
“However, for smaller towns, the government needs to rethink on the capital expenditure by the channels where they need to pay in advance to BECIL for high-end transmission and other equipments at a very high cost. The capital expenditure needs to be extremely low for smaller towns, and they also need some subsidy and tax holidays on services and imported equipments,” Mishra added.